Codere to reduce debt by $1.3 billion in major recapitalization plan

Multinational gaming company Codere has announced a recapitalization agreement to reduce its corporate debt by €1.2 billion ($1.28 billion) to €128 million ($137 million) and secure €60 million ($64 million) in new financing. The company aims to reduce debt to focus on its strategic growth and long-term value plans.

The Spanish operator stated that €20 million ($21.4 million) of the new liquidity would be available in July. The recapitalization will restructure the company's debt and equity mixture to stabilize its capital structure. Post-recapitalisation, Codere expects its leverage to be around 0.9x its adjusted EBITDA for 2023.

“It (the recapitalization) will allow the group to significantly reduce the cost of interest, thanks to the significant reduction in debt and the advantageous conditions achieved,” the company said in a statement.  

Codere's online arm reported an 80% reduction in adjusted EBITDA losses for FY2023, with Q3 adjusted EBITDA loss at €4 million ($4.3 million). As part of the transaction, Codere will transfer ownership to creditors and new financiers, supported by a significant majority of its bondholders and shareholders.

“We expect 2024 will be the year in which we pivot to profitability, generating positive adjusted EBITDA and cashflow on the back of between €185 and €200 million ($918.5 to $214.6 million) of net gaming revenue,” Codere’ CFO Oscar Iglesias said in February during the quarterly results.

The recapitalization is expected to be completed by the end of Q3 2024. In May, Codere reported Q1 revenues of €313.8 million ($336.8 million), a 14% decrease from the previous year. The group's cash position was €104 million ($111.6 million), down slightly from €107.5 million ($115 million) at the beginning of the quarter.